Accession Number : AD1029837

Title :   Impacts of Transitioning from Firm Fixed Price to Fixed Price Incentive Firm Target Contracts in PEO Missiles and Space

Descriptive Note : Technical Report

Corporate Author : Naval Postgraduate School Monterey United States

Personal Author(s) : Makowski,Suzanne E ; Ricketts,Brandi M ; Tidwell,Shannon M

Full Text :

Report Date : 01 Sep 2016

Pagination or Media Count : 105

Abstract : The objective of this project is to analyze the impacts to major weapon systems programs in Program Executive Office (PEO) Missiles and Space as a result of transitioning from firm fixed price (FFP) contracts to fixed price incentive firm target (FPIF) contracts. This project presents an in-depth examination of FFP and FPIF contract types, including definitions, profit mechanisms, and advantages and disadvantages associated with each type. This project reviews three iterations of Better Buying Power, with a specific focus on profitability and the use of FPIF contracts. The project presents and analyzes data collected through interviews with PEO Missiles and Space program management and contracting personnel who support programs that have transitioned from FFP to FPIF. The project also examines defense industry profitability and considers the perspective of defense contractors regarding Department of Defense profit policy. The analysis results indicate that the PEO is appropriately applying guidance for choosing FPIF contracts in follow-on production, and that there are both benefits and challenges associated with FPIF contracts. Recommendations include continuing to assess FPIF use for production programs, obtaining actual cost data, and improving incentive contracting workforce training. Further research on the longer-term effects of transitioning to FPIF is recommended.

Descriptors :   contract administration , personnel management , military procurement , defense industry , cost analysis , department of defense , incentive contracts , program management , aerospace industry , business administration , cost estimates , military acquisition

Subject Categories : Administration and Management
      Economics and Cost Analysis
      Logistics, Military Facilities and Supplies

Distribution Statement : APPROVED FOR PUBLIC RELEASE